[Updated Feb. 1 2023] When it comes to employee benefits in Belgium, healthcare is the most appreciated benefit by all Belgian employees. This is because social security does not cover the most expensive treatments and pharmaceuticals. Life insurance and retirement contributions follow close behind healthcare. To non-Belgian employers, the Belgian system seems very complicated because employee benefits design should supplement social security. The split of disability coverage in workers’ compensation and private health insurance is an example of this. What is also not evident is that supplementary pension plans payout as a lump sum, not on a monthly basis.
Average Cost for Healthcare
Employer-sponsored health plans cost €15 to €20 per employee per month depending on the number of insured and the places they live. Ambulatory (outpatient) and dental coverage are approximately another €20 per employee per month. The cost for family members is the same, but the employee normally pays this cost.
Mandatory employee benefits in Belgium include a spouse’s pension, disability benefits, maternity, medical, and retirement. Supplementary employee benefits in Belgium include additional spousal pension, disability benefits, maternity, medical and retirement. Perks are not common in the country.
Mandatory Employee Benefits in Belgium
Death Benefits/Spouse’s Pension
- Prior to retirement, the spouse’s pension is equal to 80% of the ‘theoretical’ retirement pension the deceased would have received had he or she been a pensioner at the moment of death. Pension benefits will end when the spouse remarries or is no longer entitled for some other reason. Should the new marriage dissolve, the surviving spouse would again have a right to a spouse’s pension (under the same qualifying requirements.)
- For death after retirement, the spouse’s pension is equal to 80% of the actual retirement pension. Pension benefits will also end when the spouse remarries or is no longer eligible for some other reason (see bullet point above).
- Social Security does not provide an orphan’s pension but provides for an increased family allowance up to age 25 if the orphan is a student.
- The amount is equal to 30 days’ income and is payable by the employer to salaried staff according to the law. Hourly paid employees are entitled to full income for one week (maintained by the employer at 100%) with a lower rate paid for the subsequent three weeks (shared by the employer and the State).
- If the employee’s loss of earnings is at least two-thirds, a statutory benefit is provided for the next 11 months equal to 60% of his/her yearly gross income, up to a ceiling of €45,858.79 if the employee is head of the household, single, or if the employee is living with a person receiving income.
- Salaried or wage earners, unemployed workers, females who stop working as of the fifth month of pregnancy, and sick or injured employees are eligible, provided that:
- They have joined a ‘Sickness Fund’ and paid the required contributions
- They have fulfilled a six-months’ compulsory waiting period and have completed at least 120 workdays
- They are not actively at work
- Their sickness or injuries causes at least a 2/3 loss of earning capacity
Maternity and Parental Benefits
- Social Security pays a cash sickness benefit equal to 82% (79.50% when unemployed) of gross salary (unlimited) during the first 31 days of maternity leave. On the 31st day of maternity leave, the benefit becomes equal to 75% of salary up to the Social Security ceiling of €110.00 per day.
- Salaried and unemployed employees are entitled to 15 weeks (19 weeks in case of twins or triplets) of maternity leave. Effective January 1, 2017, a minimum of one week must be taken before delivery, and after one week, a minimum of nine weeks.
- A Royal Decree effective January 1, 1998, allows parents, employed for at least 12 of the last 15 months, to take up to four months of full-time leave (or eight months part-time as of October 1, 1998) to take care of a young child.
- Belgium has a very strong healthcare system, and properly registered ex-pats working in the country will have access to it.
- Medical and hospital care official reimbursement rates are determined in an agreement set up between physicians, hospitals, clinics, and the government’s health authorities.
- Social Security benefit ceilings and benefit levels are index-linked and are adjusted when the cost of living index is increased by 2%. A law dated April 1, 1973, provides that in order for pensions to increase to a level parallel to the ‘general level of welfare,’ salaries, on which pension credits are calculated, are to be adjusted according to a coefficient annually determined by Royal Decree.
- All monthly paid pensions are linked to the cost-of-living index. A full pension represents 75% of base earnings for a married employee with a dependent spouse and 60% for single males and females (in accordance with the Act of May 15, 1984).
- In Belgium, since both spouses generally have a professional income, the ‘single’ pension is paid to each in the majority of cases. Base earnings are the average lifetime base earnings adjusted in line with the cost of living index. Benefits are adjusted similarly. However, the salaries used for the pension calculations of monthly-paid employees and hourly-paid employees are limited to a ceiling. Yet, a minimum pension is guaranteed to those persons having a full career or a partial career representing at least 2/3 of a full career.
- The pensioner will receive a basic and a supplementary holiday allowance. These amounts are payable in May of each year and are linked to the applicable cost of living index. These amounts are limited to the amount of pension for the month of May. During the first year of retirement, a holiday allowance is not allocated.
- In Belgium, the legal retirement age is 65. The statutory pension age will be raised to 66 in 2025 and 67 in 2030. Nevertheless, early retirement is possible, subject to certain employment conditions. As of 2019, the earliest retirement is at age 63 when having a career of 42 years, at age 61 when having a career of 43 years, and at age 60 when having a career of 44 years
- Conventional Pre-retirement A pre-retirement is determined by CLA (Collective Labor Agreement) n°17 of December 19, 1974. Pre-retirement is a special form of early retirement whereby an unemployment allowance is supplemented by an allowance from the former employer. Recently the requirements to become eligible for pre-retirement have been tightened. The minimum age for pre-retirement following CLA n° 17, as of 2019, is 62, with a minimum career of 40 years for men and 36 years for women. The employment conditions for women are gradually augmented in order to reach 40 years in 2024. Exceptions are still possible. For a full pension, both male and female employees must have been credited with a 45-year contribution period.
Supplemental Employee Benefits in Belgium
Death Benefits/Spouse’s Pension
This benefit is normally 50% to 75% of projected or actual retirement pension. Formerly a lump sum benefit, plans are now provided for a pre- and post-retirement widow’s pension of 50% to 80% of:
- Paid retirement, or
- The prospective retirement pension is calculated on the assumption that the employee would have been employed until normal retirement on the basis of the last determined pensionable salary.
The lump sum benefits provided are generally considered minimum guarantees or apply to employees who have not yet met the eligibility requirements for coverage under the pension and widow’s benefit plan. More recent plans provide for lump sum death benefit (term life) coverage of one or two times salary instead of a pre-retirement pension.
With regard to Social Security reimbursements, the occupational incapacity benefit is determined either by the step-rate or by the offset method.
- Step-rate means a percentage of the salary up to the ceiling of € 53,256.09 and another, generally higher percentage of the portion of salary exceeding the ceiling.
- The percentage applicable to the salary up to the Social Security ceiling ranges from 10% to 20%, and the percentage on the portion in excess of the ceiling ranges from 60% to 80%. It is important to note that due to the change of Social Security reimbursement, after one year of disablement, the aggregate occupational incapacity benefit will change (it will generally decrease).
- The offset method avoids any reduction in disability benefits. In this case, the change in Social Security benefits will be ‘absorbed’ by the insurer’s benefit in order to provide a constant disability pension. Waiver of group life and pension premiums is also generally provided. The disability benefits are determined according to the economic disability rating:
- Under 25%: no benefits are paid.
- Between 25% and 67%: benefits are paid in proportion to the degree of disability.
- Over 67%: 100% of the benefits are paid. Waiting Period Minimum 30 days, since the first month of disability, is compulsory paid by the employer.
The waiting period is a minimum of 30 days since the first month of disability is compulsory paid by the employer.
AG Insurance and other Belgian insurers offer unlimited hospitalization cover. These covers were introduced in 2000 (and renewed in 2015) at the request of employers who want to provide their employees with a more comprehensive cover. Formerly, AG Insurance offered a Major Medical Hospitalization limited to twice the Social Security reimbursement. This formula still exists but to a lesser degree. Employers have the possibility to add an additional out-patient insurance for their employees.
In Belgium, the retirement benefit must be settled at the moment of legal retirement. Most plans are on a career average basis, but some plans are on a final pay pension formula. For example:
- Average of the last three or five years, or
- Average of the best three (or five) during the last five (or ten) years
Typical plans provide a pension of 66% to 75% of final average earnings after a full career, integrated with Social Security. This integration is usually achieved by the “offset” or by the “step-rate” methods.
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